The optimal quantity of a product A in an optimal bundle (of products A, B, C,..., etc.) will be where the marginal benefit ( MU) of the optimal quantity of A is equal to the marginal cost ( P) of the product A. True or False?
Q: Diogo has a utility function, U(q1, q2) = q1^.8q2^.2, where q1 is chocolate candy and q2 is slices…
A: Utility function: U = q10.8 q20.2 where q1 -> chocolate candy q2 -> slice of pie p1 ->…
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A:
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A: Opportunity cost is the value of the next best alternative which is forgone.
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A: Marginal utility is the incremental/additional gain in total utility when one additional unit is…
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A: opportunity cost means the worth of the following most elevated esteemed elective utilization of…
Q: In many cases, it is reasonable to refer to the ________________ as the price Group of answer…
A: Budget constraint: It represents the different combinations of goods that can be purchased within a…
Q: Diogo has a utility function, U(q1, q2) = q1^.8q2^.2, where q1 is chocolate candy and q2 is slices…
A: In economics, utility function is an important concept that measures preferences over a set of goods…
Q: Suppose Pizza (P) and Hamburgers (H) are perfect substitutes to Kate. Two slices of Pizza always…
A: Given Pizza (P) and Hamburgers (H) are perfect substitute and utility from 2 slices of Pizza =…
Q: If the Utility function of an individual takes the form u(x, y) = (x + 2)² (y + 3)³ where U is total…
A: As given U(X,Y) = (x+2)2(y+3)3 MUx =∂U∂x
Q: If the marginal utility function of an individual takes the form U = U (x1, x2) = (x1 + 2)2 (x2 +…
A: Given, the utility function: U=U(X1, X2)=(X1+2)2(X2+3)3 i) Marginal Utilities: MUX1…
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A: Indifference Curve illustrates all combinations of goods that gives the consumer same level of…
Q: Imagine you are in a spy movie and have infiltrated an enemy production facility. You have learned…
A: We have, Production function, Q = min(x2,y) Here, x and y are inputs, and Q = production or output…
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Q: Robinson has preferences described by the utility function u(c, h) = log c – yh, where c denotes…
A: Given information u(c,h)=logc-γhc=consumptionh=hours of workwe know that l+h=1production function is…
Q: is is clearly a case of: (a) Law of supply (b) Law of diminishing returns (c) Law of diminishing…
A: # In Economics, the satisfaction derived from a unit is calculated in terms of how much utility is…
Q: Which of the following statements is NOT true? a. Utility measures the satisfaction obtained from a…
A: In economics, utility is considered as the measure to understand an individual's willingness to…
Q: Using the given information what will be the optimal production bundle? • Income = $10 • Utility…
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A: Microeconomics is the branch of social science that deals with issues concerning an individual,…
Q: Marginal benefit A) is the total benefit from all units consumed. B) is constant as more of a good…
A: Answer to the question is as follows:
Q: Ceja has utility function U=A2*B2 , where A equals the number of apples she eats each week, while B…
A: utility function U=A2*B2 where A = Apples and B = Banana Income = $20 Cost of apple = 1 cost of…
Q: The utility function of a consumer regarding two goods x and y is given by U(x,y) = x^(7.9)y^(9).…
A: U(x,y) = x7.9y9 Price of x (Px) = 19 Price of y (Py) = 80 Total Income (M) = 10800
Q: Q)Suppose we have two goods, x1 and x2, with price p1 and p2, respectively. Consider the budget…
A: The budget line shows the optimal combination of two goods and services for the consumer that he or…
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Q: The graph below shows the utility function of Mr. Ahmer for herbal tea. Given the information below…
A: The given graph represents the total utility function of Mr. A for herbal tea. Total Utility: It is…
Q: A consumer with a fixed income will maximize utility when each good is purchased in amounts such…
A: Marginal utility refers to the additional happiness a consumer gets when he/she consumes an…
Q: Suppose TC=2(w^1/α +r^1/β )y. Find the optimal bundle, (L ◦ , K ◦ ). α= 5 and β=6
A: Given TC =2w1/α+r1/βy .... (1) We have to find the optimal input bundle…
Q: The utility function is: I In(C2) U = In(C1) + 1+P The budget constraint is: -C2 =Y1+ T+r 1 Y2 C1 +…
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Q: Assume the marginal utilities for the first 3 units of a good consumed are 200, 150, and 100,…
A: In Economics, Utility refers to the total satisfaction received from consuming a goods or service.
Q: Consider a small closed economy with two consumption goods: good 1 (meat) and good 2 (berries).…
A: A closed economy does not trade with other countries. As a result, the closed economy is entirely…
Q: Suppose there are 2,000 potential consumers in the Chestnut Hill market for tablet computers. All…
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Q: If the marginal utility from consuming the sixth unit of a product is 8 and the total utility from…
A: The total utility is the total satisfaction received by consuming the goods and services. The…
Q: A positive monotonic transformation of a utility function preserves a. diminishing marginal…
A: A monotonic transformation of a utility function is a transformation in which. the ranking of the…
Q: An individual utility function is given by U(x,y) = x·y. This individual demand (optimal purchase)…
A: Given Individual utility function: U(x,y) = xy ......... (1) Let px and py be the price of good x…
Q: Given the utility function, where U is the total utility and x and y are the commodities consumed,…
A: U(x,y) = (5x+3)2(4y+2)3
Q: Suppose Hannah spends $3 to buy five biscuits. The marginal utility of the fifth biscuit is valued…
A: Utility refers to the situation where the total satisfaction derived from the consumption of goods…
Q: A KU student maximizes his sporting utility by playing Golf (G) and Tennis (T). His function is…
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Q: The slope of the budget constraint is all of the following except …........
A: A budget constraint is faced by an individual and represents the different possible combinations of…
Q: John and Sam have the same income. The stadium sells hot dogs for $4 and popcorn bags for $3. They…
A: Price of hot dogs =$4 Price of popcorn bags= $3 Income of John and Sam are same
Q: Assume that a person’s utility depends on two products, x and y. The utility function is given by…
A: Marginal utility of x and y can be calculated from the above utility function just by differentiated…
Q: Find marginal utility for each consumption level for both products and please show your work in…
A: The total utility refers to the utility that is derived out of the each additional unit of…
Q: Question 11 Marcus spends his income on movies and concerts. At his optimum, Marcus’ Group of…
A: When a consumer consumes two goods, to achieve the maximum utility at the optimum he compares…
Q: Suppose the function for the utility from good c is denoted as U(c)=2c2. Which of the following…
A: The total utility is defined as the total satisfaction a consumer is able to get by consuming a…
Q: Consumers will divide their income among all goods so that: the ratio of marginal utility to…
A: Answer: A consumer maximizes its utility where the ratios of marginal utility to the price of the…
Q: The price of good "a" is $5 and the price of good "b" is $15. If the marginal utility of good "a" is…
A: Given information: Price of a=$5 Price of b=$15 MU of a=20 MU of b=?
Q: Jane receives utility from days spent traveling on vacation domestically (D) and days spent…
A: The marginal rate of substitution is the ratio of marginal utility of good x to the marginal rate of…
Q: Suppose your total benefit from eating slices of pizza (value in dollars) is 8x−x^2, where…
A: Here the total benefit from eating slices of pizza is 8x−x^2Additionally, the total cost price of…
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- Given the utility function, where U is the total utility and x and y are the commodities consumed, find the marginal utility function of each of the two commodities.The total utility from two products is maximized at the optimal consumption bundle. True or False?Recall that Casper's utility function is 3x + y, where x is his consumption of cocoa and y is his consumption of cheese. If the total cost of x units of cocoa is x2, the price of cheese is $8, and Casper's income is $184, how many units of cocoa will he consume?
- Jane receives utility from days spent traveling on vacation domestically (D) and days spent traveling on vacation in a foreign country (F), as given by the utility function U(D,F) = 10DF. In addition, the price of a day spent traveling domestically is $100, the price of a day spent traveling in a foreign country is $400, and Jane’s annual travel budget is $4000. Suppose F is on the horizontal axis and D is on the vertical axis. Jane's marginal rate of substitution between F and D is equal to 10 1 F/D D/FAn individual utility function is given by U(x,y) = x·y. This individual demand (optimal purchase) equation for x is a factor a of I/px: x* = a (I/px). In this specific case, factor a is equal to?The utility function of a consumer regarding two goods x and y is given byU(x,y) = x^(7.9)y^(9). Good x costs 19, and good y costs 80 units of money. The consumer's entire budget is 10800 units of money. How much is her optimal consumption of the good x?
- In many cases, it is reasonable to refer to the ________________ as the price Group of answer choices budget constraint sunk cost opportunity cost marginal utilityFor the utility function above, if the price of the good is $4, what is the marginal Utility per Dollar for the fourth unit consumed? For the utility function above, if the price of the good is $2, what is the marginal Utility per Dollar for the second unit consumed?The law of diminishing marginal utility states that.. price must be lowered to induce firms to supply more of a product. beyond some point, additional units of a product will yield less and less extra satisfaction to a consumer. it will take larger and larger amounts of resources beyond some point to produce successive units of a product. total utility is maximized when consumers obtain the same amount of utility per unit of each product consumed.
- Dick, Jane, and their dog, Spot, share an apartment. Their utilities depend upon the cleanliness of the apartment and the hours spent doing housework. Dick and Jane are both averse to housework, though Dick finds it especially troublesome. Their utility functions are where c is an index of cleanliness and h represents hours of housework. The degree of cleanliness is determined by the “production function” a) Define the marginal rate of substitution MRSi as the increase in cleanliness that exactly compensates person i for one more hour of housework: and define the marginal rate of transformation as the number of hours of leisure that must must be given up to generate a one unit increase in cleanliness. Find the Samuelson condition for this economy. b) An allocation is a triplet (h D, hJ, c). What two conditions must a Pareto optimal allocation satisfy? Show that there are Pareto optimal allocations in which Dick, despite his aversion to housework, does more…At the start of the week, Marie decides to buy a pie. Does this imply that the utility she receives from this pie is greater than or less than her opportunity cost of purchasing the pie? Marie is thinking about purchasing a second pie. Do we expect the marginal utility she receives from the second pie to be greater than, less than, or equal to the marginal utility she receives from the first pie? Explain your answer.Consider a utility function l(X_{A}, X_{B}) = X_{A}*X_{B} Let P_{A} =\$3 and P_{B} =\$2. and income is set at M =\$40. Suppose P_{B} falls to P_{B}' = 1 1. Before the price change, what was x_{A} ^ * and x B^ * the optimal consumption bundles? Sketch the original budget line and label the point ( x_{A} ^ * ,x B ^ * ) as A. Let x_{A} be on the horizontal axis. 2. If, after the price change, income changed so that the original optimal bundle is just as affordable. What is the new income, m' ? At (p_{A}, p_{B}', m') what is the new optimal bundle (x_{A}', x_{B}')' Sketch the budget line associated with p_{A}, p_{B}', m' ) . Label the point (x_{A}', x_{B}') as B. 3. Does the substitution effect result in more x_{B} ? How many more or fewer? 4. After the price change, how much x_{A} and x_{B} are actually bought. ( x_{A} ^ prime prime ,x B ^ prime prime )? Sketch the budget line associated with (p_{A}, p_{B}', m) Label the point x_{4} ^ prime prime , x_{R} ^ prime prime ) as C. 5.…
